HIV-1 associated encephalopathy can show either minor or severe cognitive impariments refered to as the AIDS dementia complex as well as motor dysfunction. HIV-1 causes damage in the human brain through both direct infection and indirect mechanisms through viral structural or non-structural proteins. We have found that HIV-1 infection in children results in a different pathological consequence than in adults. There is loss of neurons, calcifications in basal ganglia structures, and cortial atrophy. We have also identified HIV-1 infection in cells that are phenotypically progenitor cells, nestin positive. These cells reside in the subventricular zone and hippocampus. In a series of 9 autopsy brain tissues, we have found a number of HIV-1 infected nestin positive cells using laser capture microdissection and PCR of viral sequences. This confirms the laboratory finding of the susceptibility of HIV-1 to infect a cell line of human brain derived progenitor cells. The ability of HIV-1 proteins, particularly tat, which is a transactivating protein to regulate cellular functions helps explain the dysfunction of the nervous system in brain tissue where there is little evidence of active virus multiplication. We found that HIV-1 infection in glial cells up regulates the synthesis and release of the beta-chemokine MCP-1 which is also found in elevated levels in the CSF of AIDS patients with dementia. Elevated levels of MCP-1 in the CSF is being studied by other AIDS Neuro Centers and has been confirmed by several other laboratories. It may serve as a surrogate marker for AIDS assoicated dementia. We have also shown that human astrocytes are responsible for MCP-1 release and that transcriptional control may be the key factor. The MCP-1 released chemoattracts monocytes across the barrier and upregulates the beta-chemokine HIV-1 co-receptor, CCR5, on migrating monocytes. The promoter sequences of the human MCP- 1 promoter shows inducible NF-1/AP-1 sites which are sensitive to the HIV-1 protein tat. We have identified the distal region of the human MCP-1 promoter as most active in regulating MCP-1 synthesis in astrocytes, indicating a role for DNA binding proteins in astrocytes that are responsive to cytokines like TNF-alpha. We have also found that MCP-1 synthesis is greatly enhanced when human fetal progenitor cells are differentiated to glial phenotypes due to activation of NF-kB in the distal region of the MCP-1 promoter. The pathological consequnces of the presence of HIV-1 in the brain needs further study.